Fair trade is a trading and campaigning movement[1] said to offer producers better opportunities for living, and consumers a more responsible way to consume.[2] The difference between fair trade and free trade, is that the former attempts to eliminate intermediaries between the producer and consumer,[3] offering the disadvantaged producer a better price, (2 &[4] ) as well as better living standards (3).
Fair trade should not be mixed with Fairtrade, as the latter refers only to Fairtrade organizations or Fairtrade certified products [5] The Fairtrade certification label shows consumers that the producers and suppliers have met certain requirements on for example longer-term buyer seller relationships, better working conditions and environmentally friendly production.[6] The fulfilling of these requirements are regularly checked by a independent third-party organization called FLO-CERT(6).
Fair trade, or alternative trade (see also Alternative Food Networks) as it has been called, is said to have begun in the US in the middle of the 40th decade, although the first official shop was not opened until 1958 in the US and the first organization, the Fair Trade Organization, was established as late as in 1964 in the UK[7] .The first Fairtrade label was launched in 1988 by the Dutch development agency Solidaridad[8] . The first product sold was coffee from Mexico, and it was branded Max Havelaar (8).
The Dutch brand and organisation Max Havelaar, nowadays also known as Fairtrade Netherlands , inspired many other countries to do the same, for example Finland with Reilukauppa (8). In 1997, Fairtrade International (formal name Fairtrade Labelling Organizations International) was established, in order to unite these national Fairtrade organizations. (8) In 2012, Transfair USA split from Fairtrade International, as they tought the Fairtrade label should be available for all producers, not only small-scale producers, and launched their own label, Fair Trade USA (6).
One of the national organizations, now member of Fairtrade International, is Fairtrade Canada (5), who in their video [9] below explains how fair trade works. They claim that the main advantages for the farmers in the developing countries to join fair trade cooperations or organizations is the minimum price they get for the products (10). Further comes benefits of a premium paid to the producer organisation, which can be used to improve either working or living conditions (10). Fair trade farmers also have more power to influence on agreements, as they do not work alone(10).
Fair trade & food
In terms of sales volume and countries involved, fair trade coffee is the most important fair-trade product[10] . Other commonly seen food products are bananas, cocoa, fresh fruit, honey, juices, rice, sugar and tea (1&10). From a share of 20 % in 1992, agricultural products had a 70 % share in 2002 of all the Fairtrade labeled products sold, and the direction seems to be towards a greater share (2).
Relation to Sustainable Development Goals
Fair trade addresses most clearly to two of the UN's Sustainable Development Goals; Goal 10: Reduce inequality within and among countries and Goal 12: Ensure sustainable consumption and production patterns.
As fair trade is about offering producers, specifically in developed countries, better prices and thus better living standards, it attempts to appeal on the UN's goal number 10 more specifically in order to assist the financial flows to the States where the need is greatest and to ensure equal opportunities by promoting actions.
On the other side of the fair trade movement, namely the consumers, fair trade attempts the UN's goal number 12 specifically by promoting practices that are sustainable, among the public and companies. Fair trade is in the end about offering more responsible ways for consumers.
Indirectly, or as a result of, fair trade relates to many other Sustainable Development Goals, as Goal 4: quality education, as fair trade certified producers gives better opportunities in this sphere, and to Goal 8: decent work and economic growth - with better salaries and more suitable working environments.
Critique
Alternative Food Networks, to which fair trade belongs, has been criticized for establishing new inequalities, as not all consumers afford fair traded products, and as producers without fair trade certifications will find themselves in poorer conditions than those with certifications[11] . Fair trade can also be seen as a paradox, since it attempts to change the unfair conditions created by the global market, by taking advantage of the global market (3).
In the video[12] below, fair trade is criticized to diminish the best available jobs in the poorest countries, as well as fair trade requirements and standards are said to be too demanding for the poorest producers to meet. Further, the better payments by fair trade is said to go to the retailers, not to the producers (14). These issues are also discussed in a study from 2012[13] and 2014 (6), and more research around the actual benefits of fair trade to the producers is required.
Corporate praxis
As the sales of fair trade certified goods has reached over $7 billion in global sales already in 2012, fair trade has gained more public awareness, and simultaneously has the influence of global retailers on fair trade certifications increased (3).
One of the biggest purchasers of fair trade certified coffee, Starbucks, has committed themselves to buy and serve fair trade coffee already for 40 years[14] . Starbucks was the the first private company to invest in the Fairtrade Access Fund, and has since 2000 funded over $14 million in farmer loans (15).
Examples from Finland
At the moment, over 1700 fair trade certified products are sold in Finland, through ordinary supermarkets, specialized shops and webshops[15] . In November 2016, Fairtrade Finland handed in a challenge to the leading retailers in Finland, asking them to provide at least one fair-trade-certified product in each category, where fair trade certified products are available [16] . This challenge was supported, and signed, by 2758 Finns (17).
The biggest chocolate confectionery in Finland, Fazer[17] , has committed themselves to buy cocoa through the Fairtrade Cocoa Program[18] , though they also buy UTZ and Rainforrest Alliance certified cocoa, as well as directly from cocoa-farmer communities [19] . Therefore, their products does not carry a Fairtrade label (19).
The video below is an interview with a representative from Pro Ethical Trade Finland, a Finnish NGO promoting responsible consumption, sustainable production and fair global trade[20].
^ Jaffee, D. (2014). Brewing Justice. Fair Trade Coffee, Sustainability, and Survival. [ebook] University of California Press. Oakland, California.
^ De Pelsmacker, P., Driesen, L. & Rayp, G. (2005). Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee. The Journal of Consumer Affairs, Vol. 39, (2), pp. 363-385.
^ Fairtrade Canada. (2016). What is Fairtrade? [video] Available: https://youtu.be/PLKTGWH398Q Accessed: 8th Feb 2017.
^ Renard, M-C. (2005). Quality certification, regulation and power in fair trade. Journal of Rural Studies, Vol. 21, pp. 419–431.
^ Goodman, D. & Goodman, M. (2009). Alternative Food Networks. In book: International Encyclopedia of Human Geography, Chapter: Alternative Food Networks, Publisher: Elsevier, Editors: Rob Kitchin, Nigel Thrift, pp.208-220.
^ Marginal Revolution University. (2015). Fair Trade: Does It Help Poor Workers? [video]. Available: https://youtu.be/ui5ruDbpyy0 Accessed: 8th Feb 2017.
^ Doherty, B., Davies, I. A., & Tranchell, S. (2012). Where now for fair trade?. Business History, Vol. 55(2), pp. 161-189.
Definition
Fair trade is a trading and campaigning movement[1] said to offer producers better opportunities for living, and consumers a more responsible way to consume.[2] The difference between fair trade and free trade, is that the former attempts to eliminate intermediaries between the producer and consumer,[3] offering the disadvantaged producer a better price, (2 &[4] ) as well as better living standards (3).
Fair trade should not be mixed with Fairtrade, as the latter refers only to Fairtrade organizations or Fairtrade certified products [5] The Fairtrade certification label shows consumers that the producers and suppliers have met certain requirements on for example longer-term buyer seller relationships, better working conditions and environmentally friendly production.[6] The fulfilling of these requirements are regularly checked by a independent third-party organization called FLO-CERT(6).
Fair trade, or alternative trade (see also Alternative Food Networks) as it has been called, is said to have begun in the US in the middle of the 40th decade, although the first official shop was not opened until 1958 in the US and the first organization, the Fair Trade Organization, was established as late as in 1964 in the UK[7] .The first Fairtrade label was launched in 1988 by the Dutch development agency Solidaridad[8] . The first product sold was coffee from Mexico, and it was branded Max Havelaar (8).
The Dutch brand and organisation Max Havelaar, nowadays also known as Fairtrade Netherlands , inspired many other countries to do the same, for example Finland with Reilukauppa (8). In 1997, Fairtrade International (formal name Fairtrade Labelling Organizations International) was established, in order to unite these national Fairtrade organizations. (8) In 2012, Transfair USA split from Fairtrade International, as they tought the Fairtrade label should be available for all producers, not only small-scale producers, and launched their own label, Fair Trade USA (6).
One of the national organizations, now member of Fairtrade International, is Fairtrade Canada (5), who in their video [9] below explains how fair trade works. They claim that the main advantages for the farmers in the developing countries to join fair trade cooperations or organizations is the minimum price they get for the products (10). Further comes benefits of a premium paid to the producer organisation, which can be used to improve either working or living conditions (10). Fair trade farmers also have more power to influence on agreements, as they do not work alone(10).
Fair trade & food
In terms of sales volume and countries involved, fair trade coffee is the most important fair-trade product[10] . Other commonly seen food products are bananas, cocoa, fresh fruit, honey, juices, rice, sugar and tea (1&10). From a share of 20 % in 1992, agricultural products had a 70 % share in 2002 of all the Fairtrade labeled products sold, and the direction seems to be towards a greater share (2).
Relation to Sustainable Development Goals
Fair trade addresses most clearly to two of the UN's Sustainable Development Goals; Goal 10: Reduce inequality within and among countries and Goal 12: Ensure sustainable consumption and production patterns.
As fair trade is about offering producers, specifically in developed countries, better prices and thus better living standards, it attempts to appeal on the UN's goal number 10 more specifically in order to assist the financial flows to the States where the need is greatest and to ensure equal opportunities by promoting actions.
On the other side of the fair trade movement, namely the consumers, fair trade attempts the UN's goal number 12 specifically by promoting practices that are sustainable, among the public and companies. Fair trade is in the end about offering more responsible ways for consumers.
Indirectly, or as a result of, fair trade relates to many other Sustainable Development Goals, as Goal 4: quality education, as fair trade certified producers gives better opportunities in this sphere, and to Goal 8: decent work and economic growth - with better salaries and more suitable working environments.
Critique
Alternative Food Networks, to which fair trade belongs, has been criticized for establishing new inequalities, as not all consumers afford fair traded products, and as producers without fair trade certifications will find themselves in poorer conditions than those with certifications[11] . Fair trade can also be seen as a paradox, since it attempts to change the unfair conditions created by the global market, by taking advantage of the global market (3).
In the video[12] below, fair trade is criticized to diminish the best available jobs in the poorest countries, as well as fair trade requirements and standards are said to be too demanding for the poorest producers to meet. Further, the better payments by fair trade is said to go to the retailers, not to the producers (14). These issues are also discussed in a study from 2012[13] and 2014 (6), and more research around the actual benefits of fair trade to the producers is required.
Corporate praxis
As the sales of fair trade certified goods has reached over $7 billion in global sales already in 2012, fair trade has gained more public awareness, and simultaneously has the influence of global retailers on fair trade certifications increased (3).
One of the biggest purchasers of fair trade certified coffee, Starbucks, has committed themselves to buy and serve fair trade coffee already for 40 years[14] . Starbucks was the the first private company to invest in the Fairtrade Access Fund, and has since 2000 funded over $14 million in farmer loans (15).
Examples from Finland
At the moment, over 1700 fair trade certified products are sold in Finland, through ordinary supermarkets, specialized shops and webshops[15] . In November 2016, Fairtrade Finland handed in a challenge to the leading retailers in Finland, asking them to provide at least one fair-trade-certified product in each category, where fair trade certified products are available [16] . This challenge was supported, and signed, by 2758 Finns (17).
The biggest chocolate confectionery in Finland, Fazer[17] , has committed themselves to buy cocoa through the Fairtrade Cocoa Program[18] , though they also buy UTZ and Rainforrest Alliance certified cocoa, as well as directly from cocoa-farmer communities [19] . Therefore, their products does not carry a Fairtrade label (19).
The video below is an interview with a representative from Pro Ethical Trade Finland, a Finnish NGO promoting responsible consumption, sustainable production and fair global trade[20].
Open source
Moore, G. (2004). The Fair Trade movement: parameters, issues and future research. Journal of business ethics, Vol. 53 (1-2). pp. 73-86.
Lyon, S. (2006). Evaluating fair trade consumption: Politics, defetishization and producer participation. //International Journal of Consumer Studies//, //30//(5), 452-464.
Raynolds, L. T. (2002). Consumer/producer links in fair trade coffee networks. Sociologia ruralis, 42(4), 404-424.
External links
World Fair Trade Organization
Fairtrade International
Fairtrade Finland
Quiz
Quiz created by Simon Vänttinen with GoConqr
http://eetti.fi/english Accessed: 28th April 2017